On January 1, 2022, Rosewood Corp purchased a put option on shares of ICM stock Terms of the contract were as follows Number of shares 100 Strike price $220 per share Expiration date May 31, 2022 Total cost of the option contract $100 Seller of the option contract First Investment Bank On January 1...

ANSWER Impact on quarterly financial statements March 31 2022 The balanc ...

On January 1, 2022, Rosewood Corp. purchased a put option on shares of ICM stock. Terms of

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Question:

On January 1, 2022, Rosewood Corp. purchased a put option on shares of ICM stock. Terms of the contract were as follows:

Number of shares: 100
Strike price: $220 per share
Expiration date: May 31, 2022
Total cost of the option contract: $100
Seller of the option contract: First Investment Bank

On January 1, 2022, ICM stock was trading at $220 per share.

The following additional information is known:

On March 31, 2022, the price of ICM stock was $210 per share. A market appraisal indicated that the time value of the option contract was $80.
On May 10, 2022, the price of ICM stock was $215 per share. A market appraisal indicated that the time value of the option contract was $70. On this date, Rosewood settled the option contract.

Required:
1. Indicate any amounts that Rosewood Corp. would have included in its March 2022 quarterly financial statements related to the option contract.